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Circuit of the Americas associate sued over real estate contract

August 1, 2012

Circuit of the Americas, which is currently being constructed in Austin, is being sued for fraud and conspiracy regarding a parcel of land near the track. Photo by LAT PHOTOGRAPHIC

A company affiliated closely with the under-construction Circuit of the Americas, the road course that is scheduled to host the U.S. Grand Prix Formula One race in November, is named in a lawsuit filed in Texas that alleges fraud and conspiracy.

The suit involves a 78-acre tract of land that is located near the track's first turn. It was filed by Hillary Ryan, listed as principal at Thunderhill Ranch Holdings LP. According to the Austin Business Journal, the suit accuses Kam Kronenberg and Accelerator Holdings LLC of fraud, civil conspiracy and tortious interference.

Ryan said he planned to buy the 78 acres in June 2010, after it had been announced that the track would be built nearby. Kronenberg, the suit says, evaluated investment opportunities for Ryan. According to the Austin Business Journal, “Kronenberg attempted to discourage Ryan from completing a contract for the land although he was aware that the facility 'was likely to be constructed' and 'was likely to have great value.' ” The suit alleges Kronenberg had Ryan's signature forged and re-assigned the contract to Accelerator, causing Ryan to lose out on an estimated $20 million in profit.

Bruce Knox, executive vice president of Circuit of the Americas, is listed as president of Accelerator Holdings. Circuit of the Americas' chief financial officer Dan Allen is listed as vice president and CFO, the Austin Business Journal says.

“It is unfortunate that Mr. Ryan was forced to file this lawsuit over what we believe is a clear abuse of a fiduciary relationship,” says Eugene Egdorf of the Lanier Law Firm, lead counsel for Ryan. “We're asking the court to hold Mr. Kronenberg and his partners responsible for the millions of dollars in lost profits that Mr. Ryan is owed.”

It seems unlikely that the suit could have an effect on the F1 race or the track's completion. Unknown, though, is whether it could impact Circuit of the America's request to the Texas Major Events Trust Fund for $20 million to $30 million, to be paid from the tax revenue the race is supposed to generate.

Meanwhile, F1 boss Bernie Ecclestone continues to refer to the June 2013 race in New Jersey in less than concrete terms. Asked at the Hungarian Grand Prix if the race would be on the 2013 schedule, Autosport said he responded, “It's supposed to be.”